5 Billion-Dollar Businesses That Began in a Dorm Room

Source: Thinkstock

Source: Thinkstock

Colleges and universities have always been a place where individuals go to further their education, learn new skills, and strive to become more rounded individuals. They are also hot spots for innovation, invention, and deep thought. One way to think of university campuses is the convergence point between old and new, where each generation is introduced to the enormity of the world and offered an opportunity to explore where each individual can find a place within it.

Some students take their time in college as a chance to get wild, explore different lifestyles, and even find a potential mate. Others don’t bother to show up mentally or sometimes physically, racking up an impressive amount of debt while coming away with very little. Then there are those who don’t bother to wait for their education to be completed before taking a stab at solving one of the world’s problems. There have been many students that have founded all types of businesses while still in school, but very few are able to establish companies with gigantic influence and staying power.

With the advent of home computing in the 1980s, followed by the emergence of the internet during the 1990s, an entire new world of opportunity opened up for businesses. Many of those businesses were born right on college campuses, sometimes in dorm rooms or garages. Students often build off of each other’s success, and under the eye and tutelage of computer scientists and professors, have been able to put together very successful ventures. As a venture triumphs in the free market, its success cascades down to other students, who often grab the baton and come up with their own innovations, pushing the envelope even further than their successors. Being on the forefront of technological innovation and in close proximity to other like-minded individuals makes universities a prime breeding ground for tech companies.

There have been an innumerable amount of attempts, but few have been able to pull off the establishment of a successful business, and even fewer while hitting the books. Here is a look at five tech companies that were founded by students, and went on to become multi-billion dollar enterprises.


Neil Hand speaks at Dell Press Conference - Source: Mike Coppola/Getty Images for DELL

Neil Hand speaks at Dell Press Conference – Source: Mike Coppola/Getty Images for DELL

1. Dell

One of the very first people to recognize the future of computing, Michael Dell founded his computer business from his dorm room at the University of Texas in Austin. He minted his company with his own name, Dell, after previously calling his venture PC’s Limited. Not only was Dell only 19 years old at the time, but he was limited to $1,000 in capital. Little did he or anyone else know he would take that $1,000 and use it to build a company that would make billions.

After founding his company in 1984, Dell designed his own computer, the Turbo PC a year later. From there, his company grew quickly and developed the fastest PC on the market, which was unveiled in 1986. As the business picked up steam, Dell built manufacturing plants across the country and capitalized on America’s new found love for computing. As home computing picked up steam through the 90s, Dell was perfectly positioned.

In 1996, the company launched Dell.com, which allowed them to take orders online and expand to even more markets across the world. It was late in the 90s when the internet really started gain traction, with all sorts of new businesses taking advantage of the online marketplace. Dell had shipped millions of PCs by this time, ensuring a good percentage of the population had the ability to get online, paving the way for future tech businesses to take advantage of the internet.


Yahoo! Inc. Celebrates 20 Years at Nasdaq - Source:  Slaven Vlasic/Getty Images

Yahoo! Inc. Celebrates 20 Years at Nasdaq – Source: Slaven Vlasic/Getty Images

2. Yahoo!

In the mid 1990s, the Internet was brand new on the scene for most of the general public. Computers had not yet become permanent fixtures in most homes, but thanks to companies like Dell, they were becoming more and more common. In 1994, Yahoo co-founders Jerry Yang and David Filo, while students at Stanford University, put together what would become one of the world’s first and most popular search engines, at the time a simple list of the pair’s favorite websites called “Jerry and David’s Guide to the World Wide Web.” As their website started to gain traction, Yang and Filo recognized the potential to turn their page into a legitimate revenue driving venture. 

They christened their new company with the name “Yahoo!,” as they reportedly liked the “rude, unsophisticated, uncouth” name, but others still say the name is an acronym for “Yet Another Hierarchical Officious Oracle.” An exclamation point was added at the end because the name “Yahoo” had already been trademarked by another company. The hired on staff members, secured funding, and took the company public. 

Yahoo!’s importance during the early days of the Internet can’t be understated. Yang and Filo developed a way to categorize web pages and make it easy for users to track down information. As the early internet was relatively hard to navigate, Yahoo became the perfect starting point to track down web pages and relevant information users were searching for. As the Internet grew, so did Yahoo’s popularity. The company was able to diversify from a simple directory to a web portal, and start acquiring other businesses, including other search engines, to further its reach.

Around the year 2000, Yahoo decided to forego developing its own search algorithms and instead licensed those of another search engine. Yahoo!’s immense traffic at the time helped launch that other search engine to internet stardom, and users eventually started going directly to its page instead of Yahoo!’s. That search engine’s name was Google.


The Google logo is displayed during the "Google Impact Challenge - Source: Toshifumi Kitamura AFP/Getty Images

The Google logo is displayed during the “Google Impact Challenge – Source: Toshifumi Kitamura

3. Google

After inking a licensing deal with Yahoo!, Google began to see exposure to high numbers of Internet traffic. Of course, this was just the very beginning of Google’s success, which would lead the company into territory nobody ever thought a search engine would find its way to. Google has gone on to be perhaps the most important internet company in the world, driving innovations of all kinds, from search algorithms to self-driving cars.

So how did it a simple search engine turn into a company that many have called a budding Skynet? It all started as so many other tech companies do — on campus at Stanford University. Co-founders Larry Page and Sergey Brin met during a campus tour, and immediately clicked, although not in a very pleasant way. The two went at it almost from the start, getting into heated debates and arguments, which exposed their similar ideas and ultimately drew them together. As Wired puts it, “Page and Brin may have clashed, but they were clearly drawn together — two swords sharpening one another.”

Page and Brin together built the search engine BackRub in 1996, a precursor to what was to come. Initially running internally on a Stanford server, but it quickly outgrew the crib. The name “Google” was trademarked, its meaning a play on the word “googol,” which is a term in mathematics that describes an almost inconceivable number — a one, followed by 100 zeroes. The company was released into the wild and moved into a garage in Menlo Park, California. As it picked up momentum, Google became known to provide extremely relevant search results, more so than any other search engine at the time.

The early 2000s saw Google add products to their lineup, including Google AdWords, Google Toolbar, Google Shopping, and more. The company started acquiring other businesses and rapidly diversifying its abilities, helping the web grow and open up countless new opportunities for other tech entrepreneurs. Google was a major catalyst behind making the internet user-friendly and a permanent fixture in today’s society. As Google found a way to connect people to information in a highly efficient way, other budding young minds were figuring out how to connect people to their social networks while online. One of those minds was a young Mark Zuckerberg.


A 'like' sign stands at the entrance of Facebook headquarters - Source: Stephen Lam/Getty Images

A ‘like’ sign stands at the entrance of Facebook headquarters – Source: Stephen Lam/Getty Images

4. Facebook

As portrayed in the movie The Social Network, Mark Zuckerberg piggybacked off of what companies like Myspace were doing and created his own social network on campus at Harvard. His project would eventually turn into Facebook and work its way into every crevice of our lives, from online shopping to commenting on news articles.

Facebook’s meteoric rise to the top of the Internet world stared from Zuckerberg’s dorm room, where he created a simple social networking platform that had half of Harvard’s undergraduate population on board after only one month. Its popularity inspired Zuckerberg to expand the network to other universities, including Yale and Stanford. Facebook, at the time, maintained a level of exclusivity, as to join you had to be a student at a participating university. It eventually spread to more than 30,000 recognized schools across the English-speaking world, and eventually allowed anyone to join, greatly increasing its user base.

The company turned the corner and decided to monetize the site, making it ad-supported but keeping the experience free for its users. The influx of revenue allowed for rapid expansion of the site across the world, while also validating Zuckerberg’s own hard work as other tech entrepreneurs watched on. Facebook was able to step up to the plate and deliver where companies like MySpace had failed, by allowing users to freely connect and communicate, but also opening up new channels for online marketing and advertising opportunities.

While Google was handling the world’s search needs, Facebook became the major player in social networking. As information and links were being shared by Facebook’s users, inspiration struck another young entrepreneur on a college campus in Virginia. With some tweaking of Facebook’s “like” system and a big enough user base, Alexis Ohanian saw an opportunity to create a platform for letting users decide what was newsworthy and what wasn’t.


Source: reddit

Source: reddit

5. Reddit

The product of a long line of technical evolution across the internet, Reddit was conceived by Steve Huffman and Alexis Ohanian while studying at the University of Virginia. Founded as an information sharing site, Reddit was built around a simple quirk that separated it from other information sites: the ability to vote on content. The “upvote” system, as it has become known, provided a way for users to have an influence on what appeared at the top page of the site, where it would gain the most exposure. This system has led to many sites gaining massive amounts of traffic in short periods of time, as shared content that makes the front page is often clicked by the millions that use the site every day.

In the beginning, Reddit was seeded by its own co-founders exploiting the system they had built. The two submitted links to content from a number of fake accounts, simply to help the site gain traction. The strategy ultimately paid off, as the site has gone from the drawing board to recieving 1.6 billion page views a month, making it one of the most popular websites in the world. Now a subsidiary of Condé Nast Publications, Reddit has has fostered hundreds of unique communities within the overall framework of its “subreddits,” or individual forums for users with specialized interests. The basic premise is, if you have an interest in something, no matter how obscure, there’s most likely a subreddit for it.

As Reddit continues to gain popularity and explode with web traffic, the next generation of web and tech entrepreneurs are undoubtedly tinkering with their own ideas, ready to challenge the world with the next big development. College campuses are often where these brilliant young minds are found, and when surrounded by the right talent and determination, world altering businesses can be founded from dorm rooms and garages. The tech world is standing by with a watchful eye on the next brilliant idea to take the world by storm.